Delcath Systems, Inc. (NASDAQ: DCTH), an interventional oncology
company focused on the treatment of rare primary and metastatic
cancers of the liver, announces financial results for the quarter
ended June 30, 2020, and will host an earnings call on August 13,
2020 at 4:30 p.m.
Recent Corporate Highlights:
- Completed a $22 million public offering, led by
healthcare-focused investors, to allow completion of the Company’s
Phase 3 registration trial of Melphalan/HDS in liver-dominant
metastatic ocular melanoma (mOM) and refiling of a New Drug
Application (NDA) with FDA.
- Uplisted to the NASDAQ Capital Market.
- Announced management and board transitions.
- Initiated pre-commercialization work for Melphalan/HDS in mOM.
- Initial physician and payer surveys have highlighted the
high-unmet medical need in mOM as well as the expectation of
ultra-orphan oncology pricing dynamic for
Melphalan/HDS.
Expected Milestones:
- Late 2020/early 2021 – COVID-19 has affected clinical trials
globally, including our Phase 3 FOCUS registration trial for
Melphalan/HDS in liver-dominant ocular melanoma. Importantly,
however, throughout these months, the trial protocol remained
intact and ongoing trial patients continued to receive treatments.
While access to clinical sites for data entry and monitoring was
severely restricted during the quarter, the majority of the study’s
European and US sites began to ease these restrictions subsequent
to quarter end. In addition, we implemented a number of steps to
increase data monitoring efforts in light of the impact of the
pandemic. Based on the current trajectory of site access,
management is focused on delivering top-line results by year-end
2020/early 2021.
- Mid-2021– New Drug Application (NDA) submission of
Melphalan/HDS in liver-dominant mOM. During the quarter management
took steps to ensure progress on key elements of our NDA
submission. Those included, among other things, required
non-clinical studies and Chemistry, Manufacturing and Controls
(CMC) work to ensure that any potential COVID-19 clinical data
delays would not affect our timelines to NDA submission.
- Initiation of additional clinical studies for Melphalan/HDS in
liver-dominant orphan cancers of high unmet-medical need. During
the quarter, in-line with the overall restructuring efforts,
management initiated a comprehensive review of the multitude of
potential pipeline opportunities available for the Company to
pursue, as potential label-expansion, beyond mOM. The analysis
comprises available clinical evidence, based on the European
commercial experience, where Melphalan/HDS is approved as a
device-only configuration under the brand name CHEMOSAT®, as well
as the potential US commercial opportunity. Based on the
conclusions of this analysis Delcath expects to initiate at least
one additional clinical development program of Melphalan/HDS in
coming quarters.
John Purpura, interim CEO of Delcath commented, “Q2 was a
transformational quarter for Delcath. The recent $22 million public
offering along with our NASDAQ uplisting have been the
culmination of a strategic restructuring achieved over the last
year. With $51.5 million raised in the 12-month period ended
June 30, 2020, led by fundamental healthcare focused investors,
Delcath has been restructured, recapitalized and refocused. Our
current cash resources, along with expected cash milestones from
our European commercialization partner, medac GmBH, provide us with
a sufficient runway through multiple value inflection points. These
include completion of our Phase 3 FOCUS trial in metastatic ocular
melanoma and the refiling of a New Drug Application (NDA) with FDA
by mid-2021.”
Mr. Purpura added, “Working towards the possibility of having
Melphalan/HDS available as a treatment for mOM patients, who have
limited therapeutic options, is Delcath’s top priority. With
Melphalan/HDS set for potential FDA approval in the second half of
2021, as the only labelled mOM-specific therapy in the US, Delcath
has begun pre-commercialization activities which it intends to
accelerate in coming quarters. Initial work has highlighted
oncologists’ perceptions of the high-unmet medical need of mOM
patients, the potential front-line positioning of Melphalan/HDS in
this setting and the expectation of attractive ultra-orphan pricing
dynamics for our therapy.”
Mr. Purpura concluded, “Interventional Oncology has become, in
recent years, an integrated, fast-growing segment of cancer care.
We believe that Melphalan/HDS is uniquely positioned as a
potentially well differentiated, high-value, interventional
oncology treatment paradigm targeting orphan and ultra-orphan
indications of high unmet medical need. Beyond mOM, Delcath is
currently looking to initiate additional studies in one or more
liver-dominant metastatic indications for which Melphalan/HDS could
be applicable. We expect the next 12 months to be transformational
for Delcath and are looking forward to providing updates on our
progress throughout.”
Second Quarter 2020 Financial Results:
Income Statement Highlights. Product revenue for the three
months ended June 30, 2020 was approximately $262 thousand,
compared to $221 thousand for the prior year period from our sales
of CHEMOSAT procedures in Europe. Selling, general and
administrative expenses were approximately $2.3 million compared to
$2.7 million in the prior year quarter. Research and
development expenses for the second quarter were $2.2 million
compared to $1.7 million in the prior year quarter. Total operating
expenses for the second quarter were $4.5 million compared with
$4.4 million in the prior year quarter.
We recorded a net loss for the three months ended June 30, 2020,
of $4.3 million, compared to a net loss of $6.0 million for the
same period in 2019.
Balance Sheet Highlights. At June 30, 2020, we had cash,
cash equivalents and restricted cash totaling $16.2 million, as
compared to cash, cash equivalents and restricted cash totaling
$10.2 million at December 31, 2019 and $1.4 million at June 30,
2019. During the three months ended June 30, 2020 and June 30,
2019, we used $7.9 million and $3.2 million, respectively, of cash
in our operating activities. In Q2 we made a number of one-time
cash payments not indicative of the usual cash usage trend totaling
approximately $3.3 million, including compensation payable
subsequent to resignations of executives and a director, and
past-due payables.
We believe our cash resources and anticipated milestone
payments, are adequate to fund our operating activities into
mid-year 2021.
Conference Call Information
To participate in this event, dial approximately 5 to 10 minutes
before the beginning of the call. Please ask for the Delcath Second
Quarter Conference Call when reaching an operator.
Date: August 13, 2020 Time: 4:30 PM Eastern Time Toll Free:
(833) 937-1050 International: (845) 403-8302
The call will also be available over the Internet and accessible
at: https://www.webcaster4.com/Webcast/Page/2475/36568.
DELCATH SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In thousands)
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Product revenue |
$ |
262 |
|
|
$ |
221 |
|
|
$ |
437 |
|
|
$ |
311 |
|
Other revenue |
|
117 |
|
|
|
191 |
|
|
|
235 |
|
|
|
371 |
|
Cost of goods sold |
|
(168 |
) |
|
|
(172 |
) |
|
|
(246 |
) |
|
|
(268 |
) |
Gross profit |
|
211 |
|
|
|
240 |
|
|
|
426 |
|
|
|
414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses |
|
2,223 |
|
|
|
1,714 |
|
|
|
5,197 |
|
|
|
5,011 |
|
Selling, general and administrative expenses |
|
2,257 |
|
|
|
2,653 |
|
|
|
4,573 |
|
|
|
5,203 |
|
Total operating expenses |
|
4,480 |
|
|
|
4,367 |
|
|
|
9,770 |
|
|
|
10,214 |
|
Operating loss |
|
(4,269 |
) |
|
|
(4,127 |
) |
|
|
(9,344 |
) |
|
|
(9,800 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of the
warrant liability, net |
|
— |
|
|
|
10 |
|
|
|
(2,832 |
) |
|
|
17 |
|
Loss on issuance of financial
instrument |
|
— |
|
|
|
(6 |
) |
|
|
— |
|
|
|
(6 |
) |
Interest expense |
|
(52 |
) |
|
|
(1,837 |
) |
|
|
(109 |
) |
|
|
(4,064 |
) |
Other income |
|
46 |
|
|
|
1 |
|
|
|
149 |
|
|
|
— |
|
Net loss |
|
(4,275 |
) |
|
|
(5,959 |
) |
|
|
(12,136 |
) |
|
|
(13,853 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deemed dividend for triggering of warrant down round feature |
|
(55 |
) |
|
|
— |
|
|
|
(55 |
) |
|
|
— |
|
Net loss attributable to common stockholders |
$ |
(4,330 |
) |
|
$ |
(5,959 |
) |
|
$ |
(12,191 |
) |
|
$ |
(13,853 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(4,275 |
) |
|
$ |
(5,959 |
) |
|
$ |
(12,136 |
) |
|
$ |
(13,853 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
(1 |
) |
|
|
(23 |
) |
|
|
65 |
|
|
|
(74 |
) |
Total other comprehensive loss |
$ |
(4,276 |
) |
|
$ |
(5,982 |
) |
|
$ |
(12,071 |
) |
|
$ |
(13,927 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per common share |
$ |
(1.90 |
) |
|
$ |
(58.50 |
) |
|
$ |
(10.40 |
) |
|
$ |
(134.55 |
) |
Diluted loss per common share |
$ |
(1.90 |
) |
|
$ |
(58.50 |
) |
|
$ |
(10.40 |
) |
|
$ |
(134.55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of basic shares outstanding |
|
2,273,187 |
|
|
|
101,862 |
|
|
|
1,171,994 |
|
|
|
102,956 |
|
Weighted average number of diluted shares outstanding |
|
2,273,187 |
|
|
|
101,862 |
|
|
|
1,171,994 |
|
|
|
102,956 |
|
DELCATH SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands)
|
June 30, |
|
|
December 31, |
|
|
2020 |
|
|
2019 |
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
16,011 |
|
|
$ |
10,002 |
|
Restricted cash |
|
181 |
|
|
|
181 |
|
Accounts receivables, net |
|
147 |
|
|
|
21 |
|
Inventories |
|
723 |
|
|
|
654 |
|
Prepaid expenses and other current assets |
|
1,992 |
|
|
|
1,759 |
|
Total current assets |
|
19,054 |
|
|
|
12,617 |
|
Property, plant and equipment, net |
|
864 |
|
|
|
735 |
|
Right-of-use assets |
|
525 |
|
|
|
860 |
|
Total assets |
$ |
20,443 |
|
|
$ |
14,212 |
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity (Deficit) |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Accounts payable |
$ |
2,174 |
|
|
$ |
4,533 |
|
Accrued expenses |
|
5,429 |
|
|
|
6,947 |
|
Lease liabilities, current portion |
|
508 |
|
|
|
664 |
|
Warrant liability |
|
— |
|
|
|
3,368 |
|
Total current liabilities |
|
8,111 |
|
|
|
15,512 |
|
Deferred revenue |
|
2,613 |
|
|
|
2,860 |
|
Lease liabilities, long-term portion |
|
17 |
|
|
|
197 |
|
Convertible notes payable, long-term |
|
2,000 |
|
|
|
2,000 |
|
Total liabilities |
|
12,741 |
|
|
|
20,569 |
|
|
|
|
|
|
|
|
|
Stockholders' equity
(deficit) |
|
|
|
|
|
|
|
Preferred stock, $.01 par value; 10,000,000 shares authorized;
25,950 and 41,517 shares issued and outstanding at June 30, 2020
and December 31, 2019, respectively |
|
— |
|
|
|
— |
|
Common stock, $.01 par value; 1,000,000,000 shares authorized;
3,521,641 and 67,091 shares issued and outstanding at June 30, 2020
and December 31, 2019, respectively |
|
35 |
|
|
|
1 |
|
Additional paid-in capital |
|
390,882 |
|
|
|
364,785 |
|
Accumulated deficit |
|
(383,307 |
) |
|
|
(371,171 |
) |
Accumulated other comprehensive income |
|
92 |
|
|
|
28 |
|
Total stockholders' equity (deficit) |
|
7,702 |
|
|
|
(6,357 |
) |
Total liabilities and stockholders' equity (deficit) |
$ |
20,443 |
|
|
$ |
14,212 |
|
|
|
|
|
|
|
|
|
About Delcath Systems, Inc.
Delcath Systems, Inc. is an interventional oncology company
focused on the treatment of primary and metastatic liver cancers.
Our investigational product – Melphalan Hydrochloride for Injection
for use with the Delcath Hepatic Delivery System (Melphalan/HDS) –
is designed to administer high-dose chemotherapy to the liver while
minimizing systemic exposure and associated side effects. In
addition to the FOCUS Trial, we have initiated a global Phase 3
clinical trial for intrahepatic cholangiocarcinoma (ICC) called The
ALIGN Trial. Melphalan/HDS has not been approved by the U.S. Food
& Drug Administration (FDA) for sale in the U.S. In Europe, our
system is marketed under the trade name Delcath CHEMOSAT® Hepatic
Delivery System for Melphalan (CHEMOSAT) and has been CE Marked and
used at major medical centers to treat a wide range of cancers of
the liver. CHEMOSAT is being marketed under an exclusive licensing
agreement with medac GmbH, a privately held multi-national
pharmaceutical company headquartered in Germany that specializes in
the treatment and diagnosis of oncological, urological and
autoimmune diseases.
Safe Harbor / Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements made by the Company or
on its behalf. This news release contains forward-looking
statements, which are subject to certain risks and uncertainties
that can cause actual results to differ materially from those
described. Factors that may cause such differences include, but are
not limited to, uncertainties relating to: the timing and results
of the Company’s clinical trials, including without
limitation the OM and ICC clinical trial programs, and timely
enrollment and treatment of patients in the global Phase 3 OM and
ICC clinical trials and the impact of the COVID-19 pandemic on the
enrollment and completion of our clinical trials; IRB or ethics
committee clearance of the Phase 3 OM and ICC Registration
trial protocols from participating sites and the timing
of site activation and subject enrollment in each trial; the impact
of the presentations at major medical conferences and future
clinical results consistent with the data presented; approval of
Individual Funding Requests for reimbursement of the CHEMOSAT
procedure; the impact, if any, of ZE reimbursement on potential
CHEMOSAT product use and sales in Germany; clinical adoption, use
and resulting sales, if any, for the CHEMOSAT system to deliver and
filter melphalan in Europe including the key markets of Germany and
the UK; the Company’s ability to successfully commercialize the
Melphalan HDS/CHEMOSAT system and the potential of the Melphalan
HDS/CHEMOSAT system as a treatment for patients with primary and
metastatic disease in the liver; our ability to obtain
reimbursement for the CHEMOSAT system in various markets; approval
of the current or future Melphalan HDS/CHEMOSAT system for delivery
and filtration of melphalan or other chemotherapeutic agents for
various indications in the U.S. and/or in foreign markets; actions
by the FDA or foreign regulatory agencies; the Company’s ability to
successfully enter into strategic partnership and distribution
arrangements in foreign markets and the timing and revenue, if any,
of the same; uncertainties relating to the timing and results of
research and development projects; and uncertainties regarding the
Company’s ability to obtain financial and other resources for any
research, development, clinical trials and commercialization
activities. These factors, and others, are discussed from time to
time in our filings with the Securities and Exchange Commission.
You should not place undue reliance on these forward-looking
statements, which speak only as of the date they are made. We
undertake no obligation to publicly update or revise these
forward-looking statements to reflect events or circumstances after
the date they are made.
Contact:
Delcath Investor Relations
Email: investorrelations@delcath.com
Hayden IR
James Carbonara(646)-755-7412james@haydenir.com
Brett Maas(646) 536-7331brett@haydenir.com
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